Mitogenic stimulation of cells induces rapid and transient activation of mitogen-activated protein kinases (MAPKs) which leads to cell proliferation and differentiation. The activation of MAPKs requires dual phosphorylation on both threonine and tyrosine residues in the T-X-Y motif, which is tightly controlled by dual-specificity MAPK kinases and MAPK phosphatases (MKPs). Hyperphorylation and hyperactivation of MAPKs caused by a dysfunction of MAPK regulatory enzyme result in human breast cancer. While a considerable amount is known about the structural and functional properties of MAPK kinases, the molecular mechanisms by which the equally important MKPs function are relatively poorly understood. The long-term objectives of this project are to understand the structure-function relationships of MKPs, enzymes representative of the family of dual-specificity protein tyrosine/threonine phosphatases (dsPTPases), which serve as important regulators in mitogenic signal transduction and cell cycle. To achieve these goals, we will study PAC1 as a model enzyme because it functions as the physiologically relevant MKP and plays an important role in the regulation of T cell activation. We will specifically investigate the structure, the mechanism of catalysis and the substrate specificity of the PAC1 phosphatase domain, by using nuclear magnetic resonance (NMR) spectroscopy, site-directed mutagenesis, and biochemical methods. PAC1 is related to other important dsPTPases, such as the cell cycle cdc25 phosphatases and the newly- discovered PTEN phosphatase which acts as a tumor suppressor and is widely mutated in human brain, breast, and prostate cancers. The results of the proposed studies should have important implications towards understanding the molecular mechanisms of protein phosphatases in normal and tumor cells and may suggest new therapeutic approaches to combat cancer. The specific aims of the proposal are to: 1. Determine the three-dimensional structure of the PAC1 phosphatase domain in its free and MAPK phosphopeptide substrate-bound forms, using heteronuclear multi-dimensional NMR spectroscopy. 2. Identify the key residues in PAC1 for substrate recognition, using NMR and site-directed mutagenesis. 3. Investigate the catalytic mechanisms for phosphotyrosine and phosphothreonine hydrolysis by the PAC1 phosphatase, using NMR spectroscopy, mutagenesis, and enzyme kinetic studies.